FROM: Barbara Hannah, Chief Counsel
SUBJECT: Update to Procedures for Disability Retirement and Formal Hearings
RECOMMENDATION:
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Recommend that the Board adopt and approve updates to the Procedures for Disability Retirement and Formal Hearings.
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BACKGROUND:
The SBCERA Board adopted the Procedures for Disability Retirement Application and Formal Hearings (“Procedures”) to govern the disability retirement process. The Procedures were last amended on April 3, 2025. After review of the Procedures, staff recommends the following updates:
1. Rule 6 - Terminated for Cause or Resigned in Lieu of Termination
Rule 6 applies when a member is terminated for cause or resigns in lieu of termination. Recently, there have been several cases in which a member resigned, but the settlement agreement did not specify whether the resignation was in lieu of termination. In other instances, a member resigned before the disciplinary process was completed, likely to avoid a final determination of termination. In both situations, the record clearly established that the circumstances were tantamount to a dismissal, thereby precluding eligibility for a disability retirement. As currently written, Rule 6 specifically addresses resignation in lieu of clear termination or termination for cause. The recommended revision would close the gap by expressly including other circumstances that are equivalent to a dismissal, such as the following:
• Where there is a settlement agreement, but such agreement is silent as to termination and the record shows that the actions of the employer would have been tantamount to a dismissal.
• Where the Participating Employer serves a notice of intent to terminate.
• Where the employee requests a Skelly hearing or one that is equivalent but then resigns prior to the conclusion of the hearing.
• Where the employee is placed on administrative leave with the employer’s intent to separate the employee for service.
2. Rule 11A - Expedited Administrative Review
The Expedited Review process allows for a determination on a disability retirement application to be made within 120 days from the date the matter is assigned to a hearing officer. Since the inception of this process, SBCERA has been limited to submitting the administrative and medical records without formally framing the Board’s position on the application or identifying the specific issues for the hearing officer to address.
Recently, it was determined that providing only the records, without a written statement outlining SBCERA’s position, the applicable legal standard, or the disputed issues, places SBCERA at a disadvantage. Without this context, the hearing officer may not have a clear understanding of the Board’s determination, the relevant factual disputes, or the legal framework guiding the determination. Accordingly, it is recommended that the process be revised to permit SBCERA to submit a Pre-Hearing Statement, along with a statement of contested issues, summary of documented evidence, and written arguments. The current version of the Rule permits the member to submit an affidavit and declaration. The proposed revision would replace that requirement with the submission of a prehearing statement.
Additionally, the submission due dates for the parties were changed to provide a period of thirty (30) days for each party to submit their Prehearing Statement and any supporting evidence. The Hearing Officer’s due date to submit the proposed recommendations and findings to SBCERA has been changed from 60 days after the assignment to 120 days after the assignment to accommodate the parties’ submission of evidence timeline. Lastly, the Hearing Officer’s jurisdiction for an Expedited Administrative Review proceeding has been changed from 120 days to 180 days.
In sum, the proposed changes would ensure that the hearing officer is fully informed of the Board’s determination on the matter and promote a more balanced and thorough review within the expedited review timeframe.
BUDGET IMPACT:
None.
STRATEGIC PLANNING GOAL/OBJECTIVE:
Operational Excellence & Efficiency
STAFF CONTACT:
Barbara Hannah
ATTACHMENTS:
Exhibit A: Redline SBCERA Procedures for Disability Retirement Applications and Formal Hearings